NSW auditor-general Bola Oyetunji warns NSW failing to reduce harm from gaming machines
One state has a legislative mandate to “minimise harm” from gaming machines, but a troubling new report shows it is failing to protect punters.
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The NSW government is failing to reduce harm from the pervasive gaming machines that fill out the state’s pubs and clubs, a troubling new report has found, with punters losing a massive pot of $8.4bn in just one year.
Auditor-general Bola Oyetunji’s Regulation of Gaming Machines report, released on Thursday morning, also reveals that the number of gaming machines across the state has increased in the past two years despite an explicit legislative push to reduce the number of machines.
“NSW had 87,749 gaming machines in operation in clubs and hotels at June 2024,” the report states.
“This means the total number of machines operating in clubs and hotels could increase by almost 8000 and remain within the current legislative cap.
“The total number of gaming machines operating in clubs and hotels has increased in each of the last two financial years by a total of 958 machines.”
The push to reduce the number of machines comes from the passage of the Gaming Machines Act in 2001.
At that time, there were more than 100,000 machines in operation.
Despite the fall to about 88,000 machines today, NSW continues to far outstrip other jurisdictions in the number on offer to punters and the decline rate is slow at about 598 machines per year.
“At this rate, it will take more than 55 years for NSW to reach parity with the national average for gaming machines per 1000 adults,” the report states.
In 2023-24, the machines generated $8.4bn in profit for pubs and clubs, with the patron losses “disproportionately concentrated” in lower socio-economic areas in Greater Sydney.
The Independent Liquor and Gaming Authority and the Department of Creative Industries, Tourism, Hospitality and Sport are responsible for regulating machines, and the auditor-general found the agencies were failing to effectively support “harm minimisation” outcomes.
“The department’s strategy for regulating gaming machines is not based on a clear understanding of current levels of gambling harm and it does not set any targets for reducing harm associated with gaming machines,” the report states.
“The department does not have benchmarks, targets or other performance measures in place to assess outcomes against key measures of harm minimisation.
“There have been no evaluations of its compliance programs to measure their impact on harm minimisation outcomes.
“As a result, the department does not know whether its regulatory strategy is effective in minimising gambling harm.”
In one example, the auditor-general found regulators had not conducted “frequent inspections” of regional venues.
“The majority of gaming machines and gaming machine losses are in the Greater Sydney region but there is also a high risk of gambling harm in some regional and rural areas,” the report states.
The state has 12 inspectors, all of whom are based in Greater Sydney.
Gambling harm levels were not falling, the report also stressed.
“For example, calls to the GambleAware Helpline increased by 8.5 per cent in 2023-24 and gaming machine losses have increased in each of the last three years,” the report states.
“The results of the 2024 NSW Gambling Survey did not indicate a reduction in the level of gambling harm in NSW.”
The auditor-general recommends several changes to improve compliance and reduce harm, setting a June 2026 deadline for the government.
For the department, the report recommends “establishing baselines and targets” for gambling harm minimisation.
It also calls for a review into the state’s gaming machine forfeiture scheme to ensure it is achieving the legislative objective of reducing the number of machines in the state.
The scheme requires the compulsory forfeiture of some gaming machine entitlements when they are transferred between venues.
For the Liquor and Gaming Authority, the auditor-general recommends it begin periodic reviews of licence conditions for venues that host machines in the highest risk locations to make sure they align with gambling harm minimisation.
The report investigated pubs and clubs and did not examine the state’s casino operators.
In a statement, Gaming and Racing Minister David Harris said the government would accept the auditor-general’s recommendations.
“While the former government over 12 years introduced several initiatives, the NSW Labor government has moved quicker and has implemented more comprehensive reforms over the past two years,” he said.
“This is complex reform, and changing behaviour takes time.
“The Government is currently considering further recommendations from the Independent Panel on Gaming Reform.”
After winning power in 2023, the government, led by Premier Chris Minns, scaled down the cash input limit from $5000 to $500 for all new gaming machines amid a sweep of gambling reforms.
It has also banned gaming-related signage outside pubs and clubs and inside them, and introduced “responsible gambling officers” in venues with more than 20 gaming machines.
Originally published as NSW auditor-general Bola Oyetunji warns NSW failing to reduce harm from gaming machines
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